Price Protection Programs
Our Price Protection Plans are a key part of our peace of mind service, but we get it, they can be confusing. Let's try to break it down for you.
What is price protection?
Price protection is like having a safety net against sudden price hikes, giving you peace of mind. We offer two options: a Fixed Price and a Price Cap.
A fixed price means you buy gallons for next winter now at a fixed rate. You'll pay the same price for propane during winter delivery. While market prices might fluctuate, you'll have the security of knowing your price in advance. This is our Fixed Price Pre-Buy.
A price cap sets the highest price you'll pay for propane. If the market price drops, you pay less. However, this protection comes at a higher cost than a fixed price. This higher cost is like paying a higher premium for better coverage. This higher cost is reflected in the price for our Prepaid Price Cap (it cost more than our Fixed Price Pre-Buy), or the Price Cap Fee you pay if you decide not to pay for your propane upfront but still want price protection.
How do we keep our price protection promises?
At Caywood Propane, we buy insurance to protect against higher prices. We use options, futures, swaps, and other Wall Street terms, but think of it like buying insurance. Our Fixed Price, Price Caps, and Price Cap Fees help cover the cost of this protection. Not all propane retailers do this, which may affect their ability to keep their price promise.
What causes price spikes?
Price spikes can happen for many reasons, but with price protection, you won't feel the pinch.
What's our prediction for this winter?
As for predicting winter prices, it's unpredictable. That's why we recommend our Price Protection Plans to avoid surprises.
Here are two things we can say for sure:
- Customers with price protection have a safety net against sudden price increases.
- Customers without price protection are taking a risk that prices won't skyrocket.
| Item | Fixed-Price Pre-Buy | Pre-Paid Price Cap | Traditional Price-Cap |
|---|---|---|---|
| Pre-Paid | Yes | Yes | No |
| Coverage Begins* | October 1 | October 1 | October 1 |
| Coverage Ends | March 31 | March 31 | March 31 |
| Program Fee | No | Yes | Yes |
| Refundable | No | No | No |
*We have the option of making deliveries under the Fixed-Price Pre-Buy, Pre-Paid Cap and Price-Cap (for Auto-Fill only) Programs before October 1.
Enrollment for Winter 2024-2025 Price Protection programs is available now through September 6. Prices are subject to change, so enroll now!
About Price Protection:
Caywood Propane offers fixed price protection and price cap protection to its customers, ensuring they have options to choose from.
Pre-Buy is a fixed price protection program that offers security at a lower price with an advance payment. Customers are required to pay for pre-buy in advance.
Price-Cap protection sets a maximum price for propane, giving customers peace of mind even during market price fluctuations. If our market price is lower than the maximum price, you only have to pay the lower price. Unlike Pre-Buy, Price-Caps do not require prepayment, but it does require payment of a nonrefundable Price-Cap fee. Customers can elect to pre-purchase their Price-Capped propane to reduce maximum price they pay for propane.
Does price protection always result in savings?
Price protection may not always result in savings if market prices are lower, but it offers stability and predictability. If prices are higher than your fixed price or your maximum price, you will save money. If prices are lower than your fixed price or maximum price, you will not save money.
Price protection, whether at a fixed price or a maximum price, may be thought of as a form of insurance against higher prices.